2016 (1) TMI 1376 - AT - Service Tax

Commercial Training or Coaching service - non-payment of service tax - Held that - The issue is indeed covered in favor of the assessee by the Delhi High Court judgment in the case of Indian Institute of Aircraft Engineering Vs. Union of India 2013 (5) TMI 592 - DELHI HIGH COURT , where it was held that An educational qualification recognized by law will not cease to be recognized by law merely because for practicing in the field to which the qualification relates, a further examination held by a body regulating that field of practice is to be taken - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant provided commercial training or coaching service.
2. Applicability of service tax demand for the period April, 2006 to March, 2012.
3. Interpretation of relevant laws and regulations governing the training institute's activities.
4. Impact of the Delhi High Court judgment in the case of Indian Institute of Aircraft Engineering Vs. Union of India on the present case.

Issue 1:
The appellant contended that it was not providing commercial training or coaching service but was an institute imparting education to Aircraft Maintenance Engineers (AME) as authorized by DGCA. It argued that it was an AME training institute approved by DGCA to conduct AME courses as mandated by civil aviation requirements. The course structure, syllabus, facilities, appointment of faculty, manner of training, examinations, certificates, and training records were all regulated by DGCA. The appellant issued aircraft maintenance engineers basic course completion certificates recognized under the Indian Aircraft Act, 1934. It emphasized that it did not offer any other courses attracting service tax, citing the Delhi High Court judgment in the case of Indian Institute of Aircraft Engineering Vs. Union of India as supporting precedent.

Issue 2:
The service tax demand of Rs. 3,08,10,504 for the period April, 2006 to March, 2012 was confirmed in the Order-in-Original. The demand was based on the assertion that the appellant provided commercial training or coaching service but failed to pay the corresponding service tax. However, the Tribunal noted that the Delhi High Court judgment in the case of Indian Institute of Aircraft Engineering Vs. Union of India favored the appellant's position. The Tribunal considered the arguments presented by both sides and concluded that the issue was indeed covered in favor of the appellant by the said judgment. Consequently, the Tribunal waived the requirement of pre-deposit, set aside the impugned order, and allowed the appeal.

Issue 3:
The appellant's activities were governed by the laws and regulations set forth by DGCA and other relevant authorities. The appellant's compliance with the civil aviation requirements, Indian Aircraft Act, and other regulations was a crucial aspect of the case. The Tribunal acknowledged the regulatory framework within which the appellant operated and considered the adherence to these regulations in determining the applicability of service tax on the appellant's services.

Issue 4:
The impact of the Delhi High Court judgment in the case of Indian Institute of Aircraft Engineering Vs. Union of India was significant in the present case. Both the appellant and the Departmental Representative recognized the relevance of this judgment in deciding the matter at hand. The Tribunal relied on this judgment as a binding precedent to rule in favor of the appellant. The judgment provided clarity on the interpretation of relevant laws and regulations concerning the appellant's activities, leading to the Tribunal's decision to allow the appeal and set aside the service tax demand.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, the relevant legal precedents, and the Tribunal's decision based on the interpretation of the law and regulations governing the appellant's activities.